M/S. Rhoda Textile Pvt. Ltd vs C.C.E & S.T. Jaipur-I

[Arising out of Order-in-Appeal No. 149(MPM)CE/JPR-1/2006 dated 18.05.2006 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Jaipur].

For approval and signature:

Honble Shri Ashok Jindal, Member (Judicial)

Hon'ble Shri B. Ravichandran, Member (Technical)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. Rhoda Textile Pvt. Ltd. .Appellants

Vs.

C.C.E & S.T. Jaipur-I .Respondent

Appearance:

Shri Vector Das, Advocate for the Appellant

Shri M.S. Negi, DR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Hon'ble Shri B. Ravichandran, Member (Technical)

Date of Hearing: 17.08.2015

FINAL ORDER NO. 52649/2015-EX(DB)

Per Ashok Jindal:

As applicant is in appeal against the impugned order.

2. The facts of the case are as under:

M/s. Rhoda Textiles Pvt. Ltd. are engaged in the export of made-up textile articles, for which they procure the fabric in running length, without payment of duty, in terms of Rule 19(2) of Central Excise Rules, 2001. As the fabric is being converted into made-up articles, the wastage occurs at various stages. The percentage wastage declared by the appellant in there ARE-2 is to the tune of around 4 to 5% and the same is being reflected by the appellant in their Form IV register on higher side.

3. Revenue, by comparing the declared wastage as also the wastage reflected in the said statutory record alleged that the difference in the percentage wastage has actually been cleared by the appellant, as such, without payment of duty, in the domestic market. Accordingly, proceedings were initiated against them proposing confirmation of demand for the past 5 years, which proceedings culminated into an order passed by the original adjudicating authority and upheld by Commissioner (Appeals).

4. The Ld. Counsel for the appellants submits that in their own case for the earlier period this Tribunal has held that allegation against the appellant is only on the basis of assumptions and presumptions and not supported by any evidence. Therefore, there appeal was allowed.

5. On the other hand, Ld. AR reiterated the findings of the impugned order.

6. Heard the parties. Considered the submission.

7. As in appellants own case for the earlier period reported in 2014 (307) ELT 358 (Tri-Del) has observed in para 5,6, and 7 as under:

5. For better appreciation, I also reproduce the relevant paragraph from Commissioner (Appeals)s order :-

I also find that, there is a difference in figures of wastage shown in ARE-2 and form IV register, the Adjudicating Authority has held that, differential wastage i.e. 609518 Sq. Mtrs. of fabrics were actually cleared at input stage and hence were not utilized for the intended purpose. In this regard the Appellants has contended that the onus of proving clandestine removal is on the department, I find onus lies on the department has been discharged as the Appellants have shown excess wastage for which neither they informed nor have manufactured goods as per the normal percentage of wastage generated 4 to 5%. In view of this I find that the demand, is based on difference of quantity of waste figures which were put forth by the Appellants in form IV and ARE-2, which is sustainable in law. In the instant case, there are positive evidence of excess waste generated as the Appellants have not shown/informed in Monthly Returns and the account of excess wastage was not explained therefore, the charges of clandestine removal are sustainable.

6. As is clear from above, the Appellate Authority is only going by the differential wastage and by considering the same as sufficient evidence for clandestine removal, is rejecting the appeal. Tribunal in the case of Klene Paks Ltd. vs. CCE, Bangalore I reported in 2009 (247) E.L.T. 271 (Tri. Bang.) has held that confirmation of demand on the allegation of clandestine removal based upon the excess wastage is only an assumption and in the absence of any evidence as to the purchaser of the alleged removed goods, demand cannot be confirmed.

7. In view of the foregoing discussions, I find no justifiable reasons to uphold the impugned orders of the authorities below. Accordingly, the same are set aside and both the appeals are allowed with consequential relief.

8. In this case also we find that allegation against the appellant has been made out on the basis of differences of waste shown in ARE 2 and form IV without any other supportive evidence. The differences in both the figures is explained by the appellant and same has not been considered by both the lower authorities. In these circumstances, allegation of clandestine removal cannot be made on the basis of assumption and presumption.

9. Therefore, following the precedent decision in appellants own case we allow the appeal with consequential relief if any.

(Dictated and pronounced in the open court)

(B. Ravichandran) (Ashok Jindal) Member (Technical) Member (Judicial)

Bhanu

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E/2714/2006-EX(DB)